Editor’s Note: Mark Wolfe is an energy economist and executive director of the National Energy Assistance Directors’ Association (NEADA), which represents the state program directors of the Low Income Home Energy Assistance Program (LIHEAP). The views expressed in this commentary are his own.
Americans now pay around $2.87 for a gallon of gas. That’s 46 cents more than last year’s average. And if trends continue, by August, the cost of gasoline may go up another five cents.
As a result, the average family will pay about $400 more for gasoline in 2018 than they did last year. That’s enough to erase the entire benefit of this year’s tax cut for low-income families.
But it could do even more damage – if families cannot afford gas, they cannot drive to work, buy groceries or take their children to school. And if they want to save enough to be able to buy gas, they may do what low-income families are known to do when home energy costs rise – cut back on essentials like food, medicine and clothing.
No American family should be forced to make that choice, so what are the options for relief?
Well, it’s worth noting that prices for gas are on the rise in large part because the Organization of the Petroleum Exporting Countries (OPEC) agreed to tighten production last November. They claimed it was “to ensure stable oil prices” and reduce excess product in the market. In actuality, it has translated to a steady increase of cost in oil.
Notably, President Donald Trump has indicated he believes OPEC is driving prices up by reducing production – tweeting the current elevated prices “will not be accepted!” The implication: OPEC nations need to pump more oil to meet the global market demand and reduce the overall cost of oil.
The good news? Members of OPEC are scheduled to meet in Vienna next week to discuss increasing oil production. Of course, there is no guarantee that OPEC will heed Trump’s Twitter rebuke. And if they don’t, Congress must act to provide relief to low-income families. Currently, there is no federal program to assist with gasoline prices, but there is a model Congress could follow to create such a program.
The Low Income Home Energy Assistance Program (LIHEAP) assists poor families in paying their home heating and cooling bills, notably also driven by the increase cost of oil. LIHEAP provides formula grants to states to provide direct assistance to about six million poor families.
A similar program providing aid to poor families during times of high gas prices would be welcome relief. And to streamline the process, the program could provide funding directly to families that are already signed up for other key social service programs like LIHEAP, Supplemental Assistance Nutrition Program (SNAP or more commonly referred to as Food Stamps), or the Women, Infant and Children (WIC) program.
It’s important to keep in mind – especially those of us for whom 46 cents is no big deal – that there are two Americas: One for those who can absorb price increases with few changes to their lifestyles and another who have to choose which bills to pay each month.
About one out of four Americans live in this second version of the country. These Americans are nurse’s aides, service workers, store clerks, and single parents working two jobs just to make ends meet. They are also grandparents who rely on Social Security to pay their bills and disabled Americans and veterans unable to return to work.
There is no perfect solution to the problem of rising gas bills. But poor families should not be expected to cover the additional cost. The government must step in, as needed, to assist.
